Mr John Ralph, AO, chairman of the Review of Business Taxation, today announced that over 70 submissions, commenting on the objectives, principles and process reforms put forward in the discussion paper, A Strong Foundation, had been received and were being reviewed.

"We were very pleased to receive so many responses and were impressed with the high quality of submissions. A satisfying feature of the responses is the extent to which they agree on the need for fundamental reform", Mr Ralph said. "In addition, the submissions have provided a number of constructive suggestions on a more detailed level, that will be of substantial help to the Review in formulating our final recommendations."

Submissions were received from many different sectors of the Australian economy. Those responding included: industry, small business and professional associations; major corporate taxpayers; accounting and law firms; government departments; universities; and private citizens. Copies of non-confidential submissions provided electronically to the Review will be made available on the Review’s internet site (http://www.rbt.treasury.gov.au). A list of submissions is attached.

Key issues raised in submissions

The submissions touched upon a wide variety of issues. Some of the major themes are outlined below.

National objectives.

The Review’s suggested national objectives for the business tax system, of optimising economic growth, promoting equity and facilitating simplification, received broad support. However, several submissions suggested that other goals could be given equal status as national objectives. For example, there was considerable support for a recognition that improving Australia’s national savings rate and international competitiveness should be objectives of an improved business tax system. Alternatively, these could be considered aspects of the optimising economic growth objective.

Income tax base.

Several submissions commented upon the Review’s adoption of an income tax base, suggesting that further consideration be given to other approaches, such as taxation based upon expenditure. Some of these submissions recognised, however, the difficulty the Review would face in developing an entirely new tax base within its scope and timeframe, and suggested that a longer term review of the tax base question be put in place.

Comprehensive income taxation.

A number of comments were received in relation to the Review’s suggested policy principle of "comprehensive income taxation". These referred to the potential cash flow and valuation problems that could be caused by taxing unrealised capital gains. A Strong Foundation acknowledges that comprehensive income taxation is not practicable to adopt as a general rule and that realisation will remain the taxing base for most categories of assets.

Tax incentive provision.

Broad support was received for the Review’s suggestion that a more rigorous process for assessing the benefits and costs of tax incentives be adopted. However, several submissions cautioned that the potential impact from removing incentives needs to be carefully assessed because of the potential negative effect on investment.

Capital gains tax and economic growth.

Several submissions argued that in some circumstances, Australia’s economic growth could be inhibited because its capital gains tax regime made it a less attractive destination for the investment of funds into new and growing businesses. The Review’s terms of reference require it to examine the possibilities of changes to CGT that would improve the performance of the economy, including the potential for reducing the personal capital gains tax rate to 30 per cent, an issue that will be considered in the next discussion paper.

Reform of the tax design process.

Submissions were broadly supportive of the proposed moves towards a more integrated tax design process. A variety of suggestions were put forward for improving the proposals, including the further involvement of private sector expertise. The establishment of a Board to oversee the business tax system’s processes received strong support. There were a range of views as to the scope and role of such a Board, its membership and to whom it should report.

Rulings.

The Review received a submission from the Australian Society of CPAs enclosing a comprehensive paper on the rulings system by Professor Graeme Cooper. Several other submissions endorsed Professor Cooper’s criticisms and suggestions.

Small business.

Small business representatives stressed to the Review that it should consider carefully whether proposed reforms will be suitable for their needs as well as for large business and take account of the disproportionate compliance costs of small businesses.

In addition, many submissions made detailed comments on specific business tax policy issues put forward in the Government’s publication, A New Tax System. Mr Ralph stated that, in many cases, these issues will be addressed in the next discussion paper, due in late February. All comments will be considered before the Review’s final report in mid-1999.

Mr Ralph thanked those individuals and organisations who made submissions: "We recognise and appreciate the time and effort put into developing these responses. I cannot over-emphasise the importance of having a range of views available to the Review."

The Review plans to issue its next discussion paper in late February, followed by a series of consultations and a call for further submissions.

22 January 1999

REVIEW OF BUSINESS TAXATION - SUBMISSIONS ON A STRONG FOUNDATION

Sub No.

Date of Sub

Name/Organisation

Contact Details

Pages

1

30/11/98

Mr R. Bastian
Council of Small Business Organisations of Australia

PO Box E445

KINGSTON ACT 2604

23

2

9/12/98

Ms A. Ryan
Australian Society of CPAs

GPO Box 2820AA

MELBOURNE VIC 3001

62

3

18/12/98

Mr R. Oser

NEW SOUTH WALES

11

4

17/12/98

Dr M. Anderson
Association of Superannuation Funds of Australia

GPO Box 1485

SYDNEY NSW 1005

26

5

17/12/98

Mr M. Roche
Australian Stock Exchange Ltd

PO Box H224

AUSTRALIA SQUARE
SYDNEY NSW 2000

12

6

18/12/98

Mr R. Bastian
Council of Small Business Organisations of Australia

PO Box E445

KINGSTON ACT 2604

7

7

22/12/98

Mr I. Sutton

Winemakers Federation of Australia

PO Box 647

MAGILL SA 5072

13

8

23/12/98

Mr H. Kobayashi

Federation of Japan Chamber of Commerce & Industry in Australia

GPO Box 344
SYDNEY NSW 2001

3

9

31/12/98

Mr T. Stolarek
Arthur Andersen

GPO Box 5151AA

MELBOURNE VIC 3001

31

10

22/12/98

Mr B. Jones
Aust Petroleum Production & Exploration Assoc. Ltd

N. Mullen
GPO Box 2201

CANBERRA ACT 2601

4

11

23/12/98

Ms W. Craik
National Farmers' Federation

R. Douglas
PO Box E10

KINGSTON ACT 2604

21

12

22/12/98

Ms J. Hellard
Law Institute of Victoria

GPO Box 263C

MELBOURNE VIC 3001

9

13

24/12/98

Mr P.J. Rizzo
Telstra Corporation

242 Exhibition Street

MELBOURNE VIC 3000

5

14

24/12/98

Mr P. Derham FNIA
National Institute of Accountants

G. Ord

PO Box 2032

HOTHAM HILL VIC 3051

16

15

23/12/98

Mr F. Ryan
Business Coalition for Tax Reform

16/379 Collins Street

MELBOURNE VIC 3000

29

16

24/12/98

Mr R. Shaddick
Shaddick & Spence

Level 32

101 Collins Street

MELBOURNE VIC 3000

17

17

23/12/98

Mr P. McDonald
Australian Taxpayers' Association

PO Box 292

EAST KEW VIC 3102

16

18

23/12/98

Mr G. Froebel
Pioneer International Ltd

Governor Phillip Tower

Level 46, 1 Farrer Place

SYDNEY NSW 2000

8

19

24/12/98

Mr M. Dolan
Electricity Supply Association of Australia Ltd

M. Mackintosh
PO Box A2492

SYDNEY SOUTH NSW 1235

5

20

24/12/98

Mr L.H. Miller
The Geelong Chamber of Commerce

211 Malop Street

GEELONG VIC 3220

4

21

24/12/98

A.R. Summers
National Mutual Holdings Ltd

GPO Box 2830AA

MELBOURNE VIC 3001

4

22

30/12/98

Mr J.C. Starkey
Australian Institute of Petroleum

500 Collins Street

MELBOURNE VIC 3000

12

23

24/12/98

Mr K. Spence
Taxation Institute of Australia

G. Petersson
7th Floor

64 Castlereagh Street

SYDNEY NSW 2000

45

24

30/12/98

Mr T Dwyer

Visiting Fellow

National Center for Development Studies

Australian National University
CANBERRA ACT 0200

5

25

3/01/99

Dr R. Keays

VICTORIA

4

26

23/12/98

Mr H. Pender

NEW SOUTH WALES

2

27

14/12/98

Mr J. Churchill
BDO Nelson Parkhill

2 Market Street

SYDNEY NSW 2000

7

28

31/12/98

Mr I.T. Dunlop
Australian Institute of Company Directors

Company Director House

Level 3

71 York Street

SYDNEY NSW 2000

6

29

5/01/99

Mr M. Stewart
The Australian Companies Institute Ltd

Level 4

131 Macquarie Street

SYDNEY NSW 2000

2

30

31/12/98

Mr T. Rumble

Australian Taxation Studies Program

UNSW

Anzac Parade

KENSINGTON NSW 2052

48

31

30/12/98

Mr R. Robins
Australian Bankers' Association

Level 42

55 Collins Street

MELBOURNE VIC 3000

4

32

23/12/98

Mr I. Langford-Brown
Institute of Chartered Accountants in Australia

Level 14

37 York Street

SYDNEY NSW 2000

34

33

22/12/98

Mr L.G. Cox
Transurban City Link Ltd

Level 43

Rialto South Tower

525 Collins Street

MELBOURNE VIC 3000

15

34

22/12/98

Mr B.J.H. Denison
Group of 100 Inc

Australian Societies of CPAs
170 Queen Street

MELBOURNE VIC 3000

2

35

31/12/98

Mr J Morgan
C/- Blake Dawson Waldron

Level 39

101 Collins Street

MELBOURNE VIC 3000

7

36

23/12/98

Ms S.L. Baylis
The Committee for Sydney

GPO BOX 4280

SYDNEY NSW 2001

20

37

Confidential

38

Confidential

39

22/12/98

Mr D. Purchase

Victorian Automobile Chamber of Commerce

464 St Kilda Road

MELBOURNE VIC 3004

2

40

22/12/98

Ms L. Ralph
Investment & Financial Services Association Ltd

Level 24

44 Market Street

SYDNEY NSW 2000

14

41

21/12/98

Mr A. Podesta
McMillan Shakespeare

M. Lyons
Level 1

84 Johnston Street

FITZROY VIC 3065

5

42

24/12/98

Mr M.F. McKenna
Financial Planning Association of Australia Ltd

PO Box 109

Collins Street

MELBOURNE VIC 3000

4

43

23/12/98

Mr R. Greenshields
AMP Ltd

GPO Box 4134
SYDNEY NSW 2001

15

44

31/12/98

Mr M. Falchoni
State Chamber of Commerce NSW

GPO Box 4280

SYDNEY NSW 2001

8

45

5/01/99

Mr D. Lynch
International Banks and Securities Association of Australia

Level 12

2 Bligh Street

SYDNEY NSW 2000

25

46

23/12/98

Mr T. Pennington
Federal Chamber of Automotive Industries

GPO Box 313

CANBERRA ACT 2601

3

47

17/12/98

Mr D. Higgins
Lend Lease

Level 46

Tower Building

Australia Square

SYDNEY NSW 2000

2

48

23/12/98

Mr D.A. Harwood
Minelab Electronics Pty Ltd

PO Box 537

TORRENSVILLE PLAZA

SA 5031

4

49

21/12/98

Mr A.T. Bendall
BOSCH

PO Box 66

CLAYTON SOUTH VIC 3168

3

50

24/12/98

Mr K. Cadell

Health Care of Australia

PO Box 1578

NORTH SYDNEY NSW 2059

4

51

24/12/98

Mr C.B. Millet

Commonwealth Bank

GPO Box 2719

SYDNEY NSW 2001

4

52

30/12/98

Mr D. O'Neill
Australian Council for Infrastructure Development Ltd

Level 7

Hambros House

167 Macquarie Street

SYDNEY NSW 2000

34

53

31/12/98

Mr M. Clough
Mallesons Stephen Jaques

525 Collins Street

MELBOURNE VIC 3000

9

54

5/01/99

Ms L. Tannahill
Office of Small Business

Department of Employment, Workplace Relations and Small Business

GPO Box 9879

CANBERRA ACT 2601

9

55

29/12/98

Ms K. Kelly
Trustee Corporations Association of Australia

GPO Box 1595

SYDNEY NSW 2001

5

56

27/12/98

Mr J. Howard
Co-operative Council of Australia

PO Box 6105

MITCHELTON QLD 4053

30

57

31/12/98

Mr P. Anderson
Insurance Council of Australia Ltd

Level 3

56 Pitt Street

SYDNEY NSW 2000

2

58

23/12/98

Mr S Shepherd
Victorian Employers' Chamber of Commerce & Industry

PO BOX 21

HAWTHORN VIC 3122

4

59

4/01/99

Mr J. Kennett
Premier of Victoria

GPO Box 4912VV
MELBOURNE VIC 3001

2

60

24/12/98

Mr S. Albin
Tourism Council Australia

PO Box 646

KINGS CROSS NSW 2011

1

61

22/12/98

Mr W.D. Ferris, AO

Venture Capital Association Ltd

Level 2

Quay West Building

111 Harrington Street

The Rocks

SYDNEY NSW 2000

50

62

24/12/98

Mr R. Gilchrist

Ernst & Young

GPO Box 67B

MELBOURNE VIC 3001

5

63

23/12/98

Mr F Sullivan
Australian Catholic Health Care Association

PO Box 57

RED HILL ACT 2603

6

64

Confidential

65

7/01/99

Mr M.H. Hooke
Australian Food Council

Locked Bag 1

Queen Victoria Terrace

BARTON ACT 2600

15

66

8/01/99

Mr P. Verwer
Property Council of Australia

Level 26

Australia Square

264-278 George Street

SYDNEY NSW 2000

11

67

5/01/99

Mr R. McLean

Chamber of Commerce & Industry WA

PO Box 6209

EAST PERTH WA 6892

50

68

8/12/98

Mr T. Kjar

Gibson Crest Pty Ltd

23 Laurel Grove

BLACKBURN VIC 3130

13

69

12/01/99

Mr J. Newby
Bentleys MRI (Qld) Pty

No Address Given

2

70

12/01/99

Mr R.C. Wells
Minerals Council of Australia

D. Dwyer
PO Box 363

DICKSON ACT 2602

7

71

24/12/98

Mr A. Moss

Macquarie Bank Limited

PO Box H68

Australia Square

SYDNEY NSW 1210

51

*Note: All submissions are available to read on-screen and to download in the submissions section of this site.